GBP/USD falls 0.4% as UK GDP contracts unexpectedly in May
GBP/USD has declined 0.4% to 1.2845 following disappointing UK economic data showing GDP contracted 0.1% month-over-month in May, missing expectations of 0.2% growth. The unexpected contraction marks the first monthly decline in 2024 and raises concerns about the UK's economic momentum. Industrial production fell 0.2% while construction output dropped 1.8%, contributing to the overall weakness. The pound's decline accelerated as traders increased bets on potential Bank of England rate cuts later this year, with market pricing now showing 45 basis points of easing expected by December. Technical indicators show GBP/USD has broken below the 50-day moving average at 1.2870, with immediate support at 1.2820. The pair faces resistance at 1.2900, which coincides with the previous week's high. Further weakness in UK data could push the pair toward the 1.2780 support level.
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